N Brown upbeat as strategic brands focus pays off
Battered N Brown group saw its share price rising early on Wednesday on the announcement of a new sub-brand being launched by the company and also its full-year results update.
This week it unveiled the more sustainable Anise womenswear brand as part of its JD Williams offer and that positive news was followed on Wednesday by its annual figures that showed growth in its strategic brands driven by an increase in total active customer numbers.
But while its key brands are expanding, overall group revenue in the 52 weeks up to late February actually dropped 1.8% to £715.7 million. And product revenue dipped by 0.6% to £465.6 million, while financial services revenue was down 4% at £250.1 million.
That came as the year still included the impact of its heritage brands offer rather than a pure focus on its strategic brands.
But at least adjusted EBITDA in FY22 was up 11.9% at £95 million and the associated margin rose 1.7ppts. Adjusted pre-tax profit was up 46.6% at £43.1 million and statutory pre-tax profit more than doubled to £19.2 million.
Looking at the details, the company said that excluding the impact of closing Figleaves in early FY22, product revenue grew by around 4%, with “growth in strategic brands more than offsetting the managed decline in other heritage brands”.
In fact, strategic brands product revenue grew 9.9%, “reflecting the benefits of strategic change and strong clothing & footwear performance”.
And year-end active customers increased for the first time in four years, “supported by the improved product offer and focused marketing”.
That came on the back of a year of increased marketing investment to further develop its strategic brands' propositions and awareness, with the first year of Amanda Holden and Davina McCall as brand ambassadors for JD Williams.
And its new in-house studio significantly enhanced its ability to “showcase product through customised content created at an efficient unit cost”.
It made “solid progress” towards the rollout of a new front-end platform for its websites, scheduled for FY23 for Simply Be. “This will provide a mobile-first experience, removing friction through journey and checkout”, it explained.
The good news comes after some tough times for the firm. Its share price is just a small fraction of its all-time high back in 2014 and has fallen over 60% in the last year alone. But it rose around 5% on Wednesday morning to value the firm at £127 million.
In June 2020 it had set out to simplify its brand portfolio through focused propositions with clear target customers. Having done substantial work in FY21 to simplify the portfolio with the closure of House of Bath, High and Mighty and the integration of Figleaves into Simply Be, the emphasis in the latest year has been on “propositional development and awareness building on strategic brands”.
That also included adding a Home category to broaden its reach and it was able to capitalise on the Homewares boom through the pandemic.
Overall, its turnaround seems to be working, although it clearly still has some way to go before it moves out of the work-in-progress phase.
CEO Steve Johnson said: “I am pleased with our continued progress in transforming N Brown into a more focused digital business, with a distinct and improving offer across our strategic brands. Our strategic brands returned to growth in the year with growing customer numbers. As we move forward, we are evolving our priorities to concentrate our growth focus on Simply Be, JD Williams and Jacamo, where we see the strongest market potential. We're executing on our investment plans to unlock these opportunities including through new websites which will be rolled out progressively over the coming months.”
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